V2X, Inc. Q4 FY2024 earnings call

• Recognized over 16,000 V2X employees for their strong performance in Q4, leading to record quarterly revenue, adjusted EBITDA, and cash flow. • Fourth quarter revenue up 11% Y/Y to $1.16B; full year revenue up 9% to $4.3B. Adjusted EBITDA Q4 $86.2M, full year $310M. Net debt improved $210M, net leverage 2.6 times. • Positioned in key theaters: Indo-Pacific saw 27% growth; U.S. ramping Warfighter-Training Readiness Solutions; Arctic with $3.95B contract; Middle East with deep mission intimacy. • Innovations: Smart Warehouse solution improves space/utilization/costs; platform modernization and rapid prototyping; $65M savings from optimized operations for DoD.

Fourth quarter revenue increased 11% year-over-year to $1.16 billion, driven by growth in all geographies with a 27% increase in the Indo-Pacific region. Full year revenue grew 9% to $4.3 billion. Adjusted EBITDA for the fourth quarter was $86.2 million and $310 million for the full year, representing 5% and 6% year-over-year growth. Net debt improved $210 million year-over-year, resulting in a 2.6 times net leverage ratio. Total backlog at the end of the year was $12.5 billion, with a 1.2 times book-to-bill ratio in the quarter.

• 2025 revenue guidance: $4.375B - $4.5B (3% midpoint growth). • Adjusted EBITDA: $305M - $320M. • Adjusted diluted EPS: $4.45 - $4.85 (7% midpoint growth). • Revenue and adjusted EBITDA expected to ramp sequentially. • Adjusted net cash provided by operating activities: $150M - $170M. • Cash interest expense expected $83M, other expense $12M, cap ex ~$30M.

• Uncertainty around budgetary environment and government contracts, including potential impacts from continuing resolutions (CR), but majority of work is immune to CR as it's existing contracts. • Variability in pipeline and bid volume due to changing customer requirements and unforeseen activities.

Q: Peter Arment asked about outcome-based contracting and CR impact.

A: Jeremy Wensinger said they convert work to fixed price and CR has modest impact as work is existing contracts. Shawn Mural added CR has modest impacts and business as usual is expected.

Q: Andre Madrid inquired about Indo-Pacific growth and EBITDA margin.

A: Shawn Mural clarified Indo-Pacific growth includes INDOPACOM. Jeremy Wensinger and Shawn Mural discussed EBITDA margin impacted by mature programs ending and new work starting.

Q: Ken Herbert asked about 2024 growth drivers and 2025 guidance.

A: Shawn Mural said 2024 growth was on-contract. Jeremy Wensinger and Shawn Mural mentioned 2025 guidance accounts for variability in pipeline and bid volume.

Q: Joe Gomes asked about pipeline and FMS.

A: Jeremy Wensinger and Shawn Mural discussed pipeline bids increasing and FMS opportunities being paced differently.

Q: Trevor Walsh asked about DoD budget cuts and net leverage.

A: Jeremy Wensinger said budget cuts are speculative. Shawn Mural stated net leverage provides optionality for capital deployment.

Q: Mariana Perez Mora asked about training opportunities.

A: Jeremy Wensinger and Shawn Mural discussed W-TRS program and on-contract growth turning task orders quickly, with task orders being turned around in a timely manner.